J.P. Morgan Managing Director and Global Market Strategist Nikolaos Panigirtzoglou said an ETF for Solana (SOL) or any other asset is unlikely to be successful.
In a statement to The Block on May 27, Panigirtzoglu argued that the SEC’s recent decision to approve a spot Ethereum ETF “already crosses the line.”
Despite the approval, it is unclear whether the SEC will consider ETH a security or a commodity.
Panigirtzoglu said the lack of clarity cast doubt on other assets as well, saying:
“I don’t think the SEC will go any further by approving Solana or any other token ETF.”
He added that the SEC believes tokens other than BTC and ETH should be classified as securities, a stronger stance than it takes toward ETH itself.
Panigirtzoglu acknowledged that U.S. lawmakers could enact legislation to classify most cryptocurrencies as non-securities, but said no such legislation exists.
People Hoping for SOL ETF
Some commentators are more optimistic about the potential of SOL ETFs.
Crypto investor Brian Kelly believes the approval of an ETH ETF increases the likelihood of a Solana ETF being approved, but acknowledged that SOL’s security status is an issue.
Bloomberg ETF analyst James Seifert expects the Solana ETF to take off within the next few years thanks to legislation such as FIT21, which distinguishes between securities and futures markets. He similarly sees Solana's security status as a potential challenge.
The odds on prediction markets are low: Polymarket reports that there is about a 13% chance that the SEC will approve the Solana ETF by the end of 2024.
The SEC considers SOLs to be securities
Regardless of how it will be treated going forward, the SEC has previously identified Solana and other altcoins as securities in various enforcement cases.
In its lawsuit against Coinbase, the SEC said Solana was one of many tokens offered as investment contracts and securities in past and current sales.
The regulator highlighted Solana Labs’ $23 million Simple Agreement for Future Tokens (SAFT) as an example of a securities offering and sale, and also called SOL a security in its lawsuits against Binance and Kraken.
However, the SEC has not initiated any direct enforcement actions against Solana Labs or any related parties.
